25 Considerations in Preparing for an IPO

Guest post by Eric Jensen of Cooley GO

1. Advisors

Choose experienced advisors early, including attorneys and auditors. Advisors who work with the SEC and investment bankers regularly will expedite the process and help avoid glitches and delays in your SEC review. Speed matters. Execution is critical.

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The Direct Listing Craze

Guest post by Cooly GO

2019 marked the rise of the Direct Listing. Though they are not exactly new structures, following the heavily-publicized Direct Listings of tech giants Spotify and Slack, they have captured the imagination of the capital markets world. Venture capitalists love them. CFOs are intrigued by them. Bankers want to hang out with them. Securities lawyers are fearless of them. And, accountants, well, they mostly roll their eyes at them. They are everywhere. Howling in the hills, whispering in the wind, psst!’ing from hastily revised pitch books. If you want to get into a Direct Listing seminar, you have to call on Tuesday morning between 9 and 9:15 am, at least a month out. The point is that Direct Listings are kind of a big deal.

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Healthcare and Tech Remain Strong During Slow IPO Market

Guest post by Carlos Juarez from Mayer Brown LLP, Free Writings + Perspectives

US IPO volume has declined by almost a quarter year-over-year, according to EY’s recent Global IPO trends report.  To date, $44.5 billion in proceeds have been raised in 127 IPOs, 23% less than at the end of Q3 2018. The third quarter of 2019 alone saw 39 IPOs in the US, which raised $11.9 billion, down 30% by number of deals.  Median deal size in Q3 2019 was $125 million, an 8% increase compared to Q3 2018, and the median post-IPO market cap for companies was $708 million according to the report.

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SEC Proposes Improvements to Acquired Business Financial Statement Requirements

Guest post by attorneys at Shearman & Sterling LLP

On May 3, 2019, the SEC proposed for public comment amendments to its rules related to the financial statements required to be disclosed by SEC reporting companies or in IPOs in connection with an acquisition or disposal of a business. These proposed rule changes are intended to improve the information that investors receive regarding the acquisition and disposition of businesses, to facilitate more timely access to capital and to reduce complexity and compliance costs.

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Silicon Valley Venture Capital Survey – Fourth Quarter 2017

 

By Cynthia Clarfield Hess, Mark A. Leahy and Khang Tran

View the full report.

Background
This report analyzes the terms of 190 venture financings closed in the fourth quarter of 2017 by companies headquartered in Silicon Valley.

Overview of Results
Valuation Results Remain Strong
Valuation results continued to be strong in Q4 2017, but the percentage price increases declined moderately compared to the prior quarter, following three consecutive quarters of increases.

Internet/Digital Media Scores Highest Valuation Results
The internet/digital media industry recorded the strongest valuation results in Q4 2017 compared to the other industries, with an average price increase of 179% and a median price increase of 51%, both up from the prior quarter.

Valuation Results Down for Series D Financings
Series D financings recorded the weakest valuation results in Q4 2017 compared to the other financing rounds, with the highest percentage of down rounds and the lowest average and median price increases of all the financing rounds.

 

FULL REPORT

 

View the original post by Fenwick & West LLP

New Prime Unicorn Index Tracks Private Companies on the Road to IPO

Index uses Lagniappe Labs’ proprietary valuation and pricing data to track top-tier, private companies with Unicorn or near-Unicorn status

SHREVEPORT, La.–(BUSINESS WIRE)–Lagniappe Labs has launched a new, equally-weighted price return index that tracks the performance of some of the most notable privately-funded companies based in the U.S. In partnership with Prime Indexes, Lagniappe Labs created the Prime Unicorn Index as a tool to benchmark the aggregate performance of private companies who have achieved or are approaching the $1 billion valuation level. The index uses Lagniappe Labs’ proprietary research and difficult-to-source, objective data to determine true valuations of privately-funded companies in a measureable and verifiable way.

Unicorns like Uber, AirBnB, Lyft, SoFi and WeWork are well-known to investors as private companies with valuations in excess of $1 billion. While there are over 200 Unicorn companies across the globe with a combined value of over $730 billion, the Prime Unicorn Index currently includes 85 companies Lagniappe Labs has classified as a Unicorn or Approaching Unicorn based on hard-to-secure public filings and data, including federal and state filings and company disclosures. The index universe will include only U.S.-based private companies with valuations at or exceeding $500 million.

“Valuations of private companies do not need to be subjective or opaque, and in fact, an official valuation can be derived when using the right data,” explains Ross Barrett, Co-Founder of Lagniappe Labs and founder of the Prime Unicorn Index. “We differentiate ourselves in our data standards and practices by using difficult-to-access information to assign an official value to these private companies that is not available anywhere else.”

As more high-performing companies defer or eliminate plans to go public, the demand for information about and investment exposure to this growing portion of the American economy has soared. The Prime Unicorn Index aims to offer investors a means to evaluate the private company space before these highly-valued firms go public.

“In today’s market environment, there is tremendous opportunity and investor interest in the private company space. However, there is very little in terms of concrete, trustworthy information for investors to act on,” explains Kris Monaco, Co-Founder of Level ETF Ventures and the firm’s related Prime Indexes business. “The companies in the index are the same businesses modern investors are using and touching on a daily basis. They are riding Uber to work, using AirBnB to book their next vacation and taking advantage of WeWork spaces to run their small business. There is a great deal of interest in these companies, and the Prime Unicorn Index is designed to help capture that enthusiasm.”

The index will serve as a benchmark for performance and valuation among private companies and for the creation of financial products. Index values are calculated daily and distributed weekly. The index will be rebalanced quarterly to reassess companies whose values may have fallen below Unicorn status or those who have gone public.

“The Prime Unicorn Index is to private companies what the S&P 500 Index is to publicly-traded companies,” adds Barrett. “We believe investors will look to the index as a way to determine the strength and overall value of private companies where they’re seeking exposure.”

For more information, please visit PrimeUnicornIndex.com or contact info@primeunicornindex.com.

About The Prime Unicorn Index

The Prime Unicorn Index is an equally-weighted price return index that measures the share price performance of U.S. private companies valued at $500 million or more. The Index was launched by Lagniappe Labs and Level ETF Ventures. The index uses Lagniappe Labs’ proprietary research and difficult-to-source, objective data to determine true valuations for privately-funded companies in a measureable and verifiable way.

About Lagniappe Labs

Lagniappe Labs is a financial technology company specializing in the development of financial products and trading software for alternative investment professionals. The company has compiled millions of data points on privately funded companies using disparate data sources, providing investment professionals with detailed analysis of private company valuations, share prices, and securities sold.

About Prime Indexes

Prime Indexes creates financial indexes that solve problems for both professional and self-directed investors. Our index designs focus on emerging trends in the exchange-traded fund (ETF) industry, and our founders have participated in the creation and launch of over a hundred financial products and indexes across all major asset class. Prime Indexes are used as the basis for innovative new investment solutions for investors, and use intuitive design principles so that new investment products can ultimately provide low-cost, efficient, and convenient access.

Contacts

Gregory FCA for the Prime Unicorn Index
Marissa Foy Comerford, 610-228-2104
unicornindex@gregoryfca.com